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GM ignition accident compensation payout terms announced

Funds will go to surviving victims and families of those whose deaths are linked to ignition switch problems

Published: June 30, 2014 04:00 PM

People who were injured and the families of those people who died as a result of faulty ignition switches in various GM cars will receive compensation from the company.

In a press conference today, Kenneth R. Feinberg, administrator of the GM Ignition Compensation Claims Resolution Facility, announced a compensation program for victims and their families. As previously stated, the compensation would have no cap and Feinberg—not GM—will decide eligibility and compensation amounts.

The payout is related to an ignition defect that was identified more than a decade ago, yet the underperforming component was installed in various GM vehicles for years. GM engineers determined that a widely used ignition switch created a risk that cars could be unintentionally turned off, thereby deactivating air bags, and removing the power-assist from steering and brakes. A replacement part was eventually developed and deployed with the same part number, further confusing the situation and making it difficult for officials to accurately track under-performing parts for recall. Thirteen deaths and 31 accidents have been linked to the defect, but it is widely assumed that more victims will be identified. Compensation will vary depending on the severity of injuries and if there was a death.

Eligible vehicles that used the original switch include:

Chevrolet Cobalt (2005-2007)

Chevrolet HHR (2006-2007)

Pontiac G4 (2005-2006)

Pontiac G5 (2007)

Pontiac Pursuit (2005-2006)

Pontiac Solstice (2006-2007)

Saturn Ion (2003-2007)

Saturn Sky (2007)

Vehicles that featured the replacement part (No. 10392423) and were in a related accident are eligible, as well:

Chevrolet Cobalt (2008-2010)

Chevrolet HHR (2008-2011)

Pontiac G5 (2008-2010)

Pontiac Solstice (2008-2010)

Saturn Sky (2008-2010)

The program will begin receiving claims on Aug. 1, 2014, through Dec. 31, 2014. Even those who already settled claims will be permitted to file again through this program for additional compensation. For more details on the plan and to download a form, go to www.gmignitioncompensation.com.

“We are pleased that Mr. Feinberg has completed the next step with our ignition switch compensation program to help victims and their families," Mary Barra, GM’s chief executive, said. "We are taking responsibility for what has happened by treating them with compassion, decency and fairness. To that end, we are looking forward to Mr. Feinberg handling claims in a fair and expeditious manner.”

Ellen Bloom, senior director of federal policy for Consumers Union, the advocacy arm of Consumer Reports, said: "There is a long list of things that GM must do in the wake of this debacle, and one of them is establish a fund for the victims. We’ve been pressing GM to step up and do the right thing here, and we’re going to sort through the details of the plan unveiled today by Mr. Feinberg. We were concerned that GM’s bankruptcy might be used to deny certain victims from being compensated, or the amount set aside for the fund might be inadequate, but Mr. Feinberg has indicated that won’t be the case. We’re going to be watching closely to make sure people are treated fairly and their claims are processed quickly. Beyond this fund, there are several bills in Congress to improve auto safety and hold manufacturers accountable, and we’re going to keep pushing for these reforms."

In related news, General Motors issued six new recalls today, affecting about 7.6 million vehicles in the United States from model years 1997 to 2014.